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Archive for June, 2011

Public liability insurance – £10,000,000 limit of indemnity

Friday, June 17th, 2011

If you are a contractor (ie working for, or providing services to another company or organisation) then you will probably have been asked at some point to prove you have public liability insurance in force. Why does this happen? The insurers of the people you work for will, more than likely, have applied a bona-fide sub-contractors checking condition. A bit of a mouthful, but basically they are saying that if they are providing liability cover, they do not want to have to pay out for the actions, errors or injuries/damage caused by contractors. To cover this they say that there must be a check of the liability cover.

Now, the lengths that companies go to vary a great deal. As a business insurance broker, we have a specially designed, single page, proof of cover document which is acceptable to insurers and outlines exactly what they are looking for. The variances go from just being asked “do you have cover”, to proving you have cover, to proving you have cover at a certain limit of indemnity.

The last one is causing some customers to review their liability insurance arrangements. It used to be that most companies were happy with £5,000,000 as an absolute maximum. Nowadays though, there are more and more asking for £10,000,000. Of course, this is way, way over the top in 95% of cases, bit this does not stop companies asking for it. Worse than that, if you cannot prove this, they will not pay you, simple as that.

Businessinsure are able to get you cover up to £10,000,000 by providing you with £5,000,000 from your main insurers and then going to another one for the additional £5,000,000, to give the £10m you need. Even if you do not deal with us for your main insurance, we can get you an excess layer quote, usually the premium is between £550 and £600 per annum. All we would need is a copy of your underlying, or main insurance policy.

Posted in business insurance, business insurance broker, excess of loss insurance, public liability insurance | Comments Off

High risk liability insurance

Friday, June 17th, 2011

Many of the commercial insurance companies that offer liability cover are very restricted in what they can and can’t do. For example, any trades that involve the use of heat, ie blow torches and blow lamps are OK, but the limits of liability available are low. Very few insurers will allow cover above a limit of indemnity of £2,000,000 any one claim. Some may go up to five but you need to know where to look to get a competitive premium.

Certain trades are considered a heavy risk, and these usually fall under the category of high risk liability insurance. Trades such as those where height work (above 10 metres is involved) depth work (below 2 metres) or at higher risk locations such as airports fall into this category.

If you are looking for a quote and you fall into this category, you will be faced with a frustrating time on the phone if you try some of the online providers. Many of the websites that offer to compare your business insurance or get you the cheapest business insurance are way too selective. As soon as you say something that doesn’t fit into one of their nice boxes or categories, they do not want to know.

Time and time again we have blogged and posted that the only way to get yourself a decent priced quote is to go through a broker. We are independent and can go to any number of insurers we choose to get you the best price and cover. If your business is on the higher risk side or falls between two or three categories, this is where a broker comes into their own.

Businessinsure have access to a range of insurers that are happy to provide high risk liability cover. Of course the questions are more detailed and you may need to show us Health and Safety statements and procedures, but we can at least get you a quote at the end of the day.

Posted in business insurance, high risk liability insurance | Comments Off

Making complaints about your business insurance broker

Wednesday, June 15th, 2011

We have seen in the press recently details about complaints relating to payment protection insurance. We understand why these complaints have started, it was always fairly obvious that at some point the bubble would burst. Policies were sold and anyone that tried to claim would have such a hard job to try and get their claim paid. I remember reading in one of the Sunday papers about someone that had a policy and the insurers insisted in them applying for over 100 jobs per month, and proving this, before they would consider the claim.

The bit that frustrates us, is that even businessinsure, who have never sold one of these policies as we are a pure business insurance broker, have to pay towards the cost of these complaints. That however, is an aside, there is nothing that we can do about it and have to just pay the costs to the FSA.

But what happens if you are making a complaint about your business or commercial insurance? We have had one or two customers complain over the years. The first that tends to happen is that they will say, I am going to speak to the Ombudsman. Now, the complaints have not been about us, but the insurers behind the policies. The correct process though, before going to the Ombudsman, is to raise your complaint with either the broker and/or the insurers of the initial policy. What happens is that you have to exhaust the internal complaints process, before you get to the stage of requesting that the Ombudsman makes a decision. This applies to all types of insurance, whether domestic or business, as long as your turnover is below a certain threshold.

In reality, most complaints are dealt with there and then by the brokers and insurers, usually through what is called an ex-gratia claim process. This is where an insurer agrees to pay a claim, that is not covered, because of the overall value of their relationship with the insurance broker in question.

If you have any cause for complaint, speak to your broker in the first instance.

Posted in business insurance broker, commercial insurance | Comments Off

Does geography really matter in business insurance?

Tuesday, June 14th, 2011

BIB is a little bit disappointed today. If there is one thing that is as bad as losing an existing customer, it is not getting a piece of new business where we have done all the running.

BIB will explain. In the good old days, if you were looking for a business insurance quote, you would be restricted to searching your local market. There was not so much a cartel, but an unwritten agreement that you stuck to your own patch. So, if a business in my home turf of South London decided to telephone a broker in Perth, my new turf the insurers would sharply intake breath and then ask, why is a business in London not looking for quotes on their own doorstep.

This was the way it was until Peter Wood started the revolution in 1985/1986 with a dozen staff in Croydon. The man is a complete and utter pioneer of the insurance world, at some point everyone in the industry will come across a company or way of doing things that stems from what this man has achieved. It became normal (to certain insurers) to accept that someone in Exmouth may choose to buy their insurance over the phone, not caring where the insurance company was based.

Fast forward twenty five years and you have companies, such as businessinsure, happily offering commercial insurance to companies throughout the UK. Last week we had a call from someone unhappy with their existing broker who had offered the same insurer for 6 years and the price had gone up year on year. Admittedly by only a few percent each year, but they were being offered renewal at nearly £8,000. We managed to get them an alternative, with a different insurer, with wider cover, at £6,000.

BIB thought is was a no-brainer, they were unhappy with their broker, who was at best lazy and complacent. But, believe it or not they managed to beg the customer to stay with them, after reducing their cost to £6,000, because they said the customer, who was in England, would not get a decent service, in the event of a claim, from a broker in Scotland.

Now, this is complete and utter tosh, but the customer, as far as BIB is concerned, was scared into staying, which is wrong. The customer has done the brokers job and who gets rewarded? The local broker who would have been more than happy to fleece them of an extra £2,000 if BIB had not found such a good alternative.

Geography does not matter, insurers appoint loss adjusters to look into losses, a broker can deal as effectivley wiht a claim, at distance, as they can on the doorstep.

Posted in Geography, business insurance | Comments Off

Introducing BIB

Tuesday, June 14th, 2011

For those of you that look at our blog, yes there are some out there who visit more than once, for which we thank you, we would like to intoduce you to BIB. Bib is our business insurance broker, depending on what day, it could be a he or a she. Sometimes we speak to customers, hear things, do things or are just aware of business insurance related matters. This is where BIB comes in, on a frequent/infrequent, maybe daily/weekly/monthly basis, reports will be posted on things we have learned, good and bad about this industry that we do live in.

So when we talk about BIB, you know it is nothign to do with feeding time for the under 3’s.

Posted in BIB, business insurance broker | Comments Off

Franchised sandwich bar insurance

Monday, June 13th, 2011

Having spent yesterday wandering around a shopping centre, at times aimlessly, I was struck by the number of food establishments. We are, as a nation, eating healthier in the UK. This is why out of the 25 or so food places, less than five were what I would call unhealthy fast food. The others offered much healthier (to me) sandwiches and the like.

All of these companies will have some form of business insurance requirement, usually with liability limits set by the shopping centre owners. We are approached on a fairly regular basis to provide quotes against many of the franchised businesses scheme insurance arrangements. What normally happens is that the franchise owner works with a broker to design a scheme that is competitively priced and offers wider cover. As the scheme grows, the premiums go up, not by much, year after year as all the businesses covered under the scheme pay similar premiums. But, when one, two or more businesses suffer large claims, the pricing on the whole scheme can go up.

This has happened to one of the larger companies that offered sandwich shop insurance through one broker, with one insurer. We were asked to quote for one of the franchise holders on a regional basis. They owned 7 shops and their overall insurance bill was averaging out at £800 per shop. We approached another insurer, on an individual basis for all the shops and got the price down to £600.

The only reason we could do this is that we are independent and could choose what we wanted to do and where we wanted to go. We saved them nearly £1,500 and they also had better excesses. This is where you should not always assume that because you are being offered a bespoke scheme, that you are getting a combination of the best price and best cover. You should always look around to see what alternatives are available on the other side of the fence.

Posted in business insurance, franchise insurance, sandwich shop insurance | Comments Off

The FSA and insurance comparison websites – part deux

Saturday, June 11th, 2011

So, we have seen the whole of the insurance industry reporting about the FSA and it’s letter to the comparison sites.

The FSA are not saying that they want to check how these sites fit in the whole distribution pattern, what they are saying is that “consumers may be being misled”. This is a bit of a sledgehammer blow, it is like the government telling the automotive industry that cars are being sold which may not have the right brakes. It is such an integral part of our industry, to talk to customers to understand what their business insurance needs and wants are.

We do not like the fact that these sites have pre-filled boxes, by the dozen, that assume this and expect that and lo and behold, when the customer gets to the end the quote is very cheap. It is cheap because they are supposed to have a Redcare alarm, they need to have full shop front roller shutters, they need to have BS3621 locks, they must have five years trading experience, they are not in a flood area, they do not have DSS tenants living above etc etc. The systems assume and the only reason they do this is because they want to sell on price.

If they got the full facts on every single risk then we know full well that they would not be quoting the dirt cheap prices they do. In addition to the assumptions that are made, we have the second issue of the actual quality of the policy they get. Is it made clear to the customer that they only have £1,000 glass cover, the theft excess is £500 and they don’t have portable equipment or legal expenses cover? To name but a few. Of course not. We think these sites have a place in the market, some people want to be able to sort out their insurance cover outside of normal business hours, but when they do this via a website, we would prefer the playing field to be as level as possible.

Posted in Financial Services Authority, business insurance | No Comments »

The Financial Service Authority and Insurance Comparison Websites

Friday, June 10th, 2011

June 2011, FSA headquarters, Canary Wharf – a letter has been issued to all companies, that the FSA is aware of, that operate insurance, including business insurance, comparison websites.

The full text of the letter can be found here. This is very interesting, to those of us in the industry. We have grown up with the red telephone and Churchill the dog selling policies over the phone. We are happy that they fill a void in the market and, above all, play fair. The comparison sites however, do not in our opinion, play fair either. They flog as many policies as they can based on price and price alone.

If I had a pound coin for every customer that came to us, after having bought a policy from one of these sites, only to find that their cover was not that good or the excesses to high, then I would be going to the same clinic as Wayne Rooney to get some extra hair stuck on my head. We find it extremely frustrating that, as an independent business insurance broker, we have to go through certain processes to ensure we treat customers as fairly as possible. Not that we begrudge this, it is our job and we enjoy going through this process. But, when we get a customer what we consider to be a competitive alternative quote and they say that ABC comparison site has done it for £250 less we have to explain to the customer that there is a fair chance that the alternative is not that good. The customer then thinks that we are just saying that as it is sour grapes but, on many occassions we have had the quotes emailed through to us and everything, from the excesses, to the terms, to the warranties is wrong. If they have a loss, you just know that they are going to be out of pocket. But, the product is sold on price and given where UK plc has been in the last three years, you can kind of understand why price is such an issue.

Let’s see how much of a follow up the FSA does on this, they have had their fingers burned by the disaster with the banks which they really should have picked up on. I hope this is one way the FSA are going to get some credibility back.

Posted in Business insurance comparison websites, Financial Services Authority, business insurance | Comments Off

Business insurance – not falling under a package policy

Thursday, June 9th, 2011

What do you do, if you are looking for a business insurance quote and you do not fit into one of the insurers preferred categories?

This can be frustrating, everyone is telling you that you must go onto one of the insurance comparison sites and they will save you tens/hundreds/thousands of pounds (delete as applicable depending on who you believe). Then, you sit down and look at one of the sites and lo and behold, your restaurant, that has a couple of letting rooms above, does not fit into either their restaurant insurance or hotel insurance category.

Then, when you look around for a number to call, you get nowhere fast. They do not want you to call, because that means that they have to have staff, human beings, available to give you advice. What they want to do is pile it high and sell it cheap, if you don’t fit, they don’t want to know.

This is where you need to speak to a business insurance broker. Those that have read our previous posts will notice a theme here. Yes, we are brokers ourselves, but people tar the whole industry with the same brush when they visit one of these inflexible sites.

Yesterday for example, a customer mentioned a site that offered 60 second property owners insurance quotes. Buildings quotes are some of the quickest to offer, but the customer wanted to know how this site, which was s-l-o-o-o-o-w, could offer to do this. We had a look as well and, even with our super-fast new broadband, could not get a quote within 3 minutes. Even then, this was with us knowing exactly what the answers should be to the questions. Heaven help anyone who is not as au fait with insurance as we are.

So, we gave the customer their quote and they took it out over the phone. Payment was taken and the policy was issued in the first class post, job done.

Posted in business insurance, business insurance advice, business insurance broker, restaurant insurance | Comments Off

Office insurance – product liability

Wednesday, June 8th, 2011

We are seeing more and more office insurance quotes, where there is an increased product liability exposure. This occurs where an office based business is, to all intents and purposes, acting as a wholesaler. They may not actually hold the full amount of stock, as this is warehoused. What they will do is have a basic amount of day to day promotional stock. This can be anything and everything. The two quotes we have had this week have been for a farm machinery dealers office and a computer resellers.

Normally, you would approach a business insurance broker and they would get a simple, basic office quote. Now, if you are a dealer, what happens if one of the products that you supply causes injury, illness, disease or damage? You may well think that you can pass this liability on to the company that supplied the machine, or computer, or book or whatever else you sell.

However there is a potential problem. Firstly, you may not be allowed to do this contractually. Deep in the terms and conditions of the sellers may be a clause that says they are not responsible for damage or injury caused. Secondly, they may not have insurance in place and thirdly, they could go bust or out of business by the time you want to claim. Whether you like it or not, in each of these 3 scenarios, your company will be expected to pay the claim. You cannot simply rely on a basic office package to pick up your liability in this case.

You need to speak to your broker and get them to advise you as to whether you need to take out, what is effectively a contingency cover. You will need to declare your turnover, where you source the products from, where you export to and importantly, what type of products. It is not that insurers do not like imported products, but that it is much more expensive to pursue a claim against an overseas manufacturer.

Posted in business insurance, office insurance, office insurance quote, products liability insurance | Comments Off